Asian stocks rise as China moves to boost housing

File photo – August 24, 2015 Investor stands in front of an electronic board displaying stock information on a brokerage firm in Shanghai, China. REUTERS / Aly Song

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  • MSCI Asia Ex-Japan + 1.8%, Nikkei + 1.3%
  • European stocks will follow Asia’s lead
  • Shares rise after China lowers debt prime rate
  • Global stocks are set for a 7th week loss

SHANGHAI, May 20 (Reuters) – Asian stocks rose on Friday after China cut key debt rating to support a sluggish economy, but global equities recorded its long-term weekly losses amid investor concerns about sluggish growth.

China cut its five-year debt prime ratio (LPR) by 15 basis points on Friday morning, sharper than expected, as officials seek to ease the recession by reviving the housing sector. The five-year rate affects the price of mortgages. read more

Wide index of MSCI of Asia-Pacific equities outside Japan (.MIAPJ0000PUS) Early gains after the cut were made quickly and were last over 1.8%.

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Euro Stocks 50 futures, German DAX futures and FTSE futures all rose more than 1%, with European stocks set to follow Asia’s lead.

Chinese blue-chips also rose 1.8%, driven by overseas buying and Hong Kong’s Hong Cheng index. (.HSI) Australian stocks rose more than 2% (.AXJO) 1.1% higher. In Tokyo, the Nikkei stock index (.N225) 1.3% received.

“This will certainly not be enough to reverse the growth in Q2, the (cut) is making a move in the right direction, so markets may react to strong easing expectations,” said Carlos Casanova, senior Asian economist at Union Banker Privy. In Hong Kong.

Despite the gains in Asian stocks, MSCI is the global price index for all countries (.MIWD00000PUS) Since its inception in 2001, it has been in red for its seventh week in a row. This would be too long, including post-test data extended to January 1988.

Concerns about the impact of supply chains affected by inflation and growth prompted investors to exit shares of Cisco Systems Inc. (CSCO.O) After citing the impact of China’s COVID locks and warnings of persistent component shortages, it fell to an 18 – month low on Thursday. read more

On Friday, Shanghai, China’s financial center, announced three new COVID – 19 cases outside isolated areas, crushing residents’ hopes for a smooth end to sanctions – with plans to end a prolonged city-wide lockout set for June 1 on track. . read more

Industrial production in the city shrank by more than 60% in April from a year earlier due to the impact of corona virus controls. read more

“The focus of the (Chinese) authorities is on easing the policies to mitigate the impact of the Govt repression … The problem is that as long as the Govt repression policy is strictly enforced, such mitigation policies will not have a real impact,” said Christopher Wood, Geoffrey’s global shareholder.

Asia’s gains came after a late rally on Wall Street that left the Dow Jones Industrial Average. (.DJI) 0.75% lower, S&P 500 (.SPX) 0.58% reduction and Nasdaq compound (.IXIC) Reduced by 0.26%.

Strong yuan

At the Interbank Foreign Exchange (Forex) market, the dollar fell 0.12% to 102.79, the lowest level in seven seasons.

Elsewhere, moves were blocked as the yen was on the strong side of the dollar against 127.76. The euro was slightly higher at $ 1.0586, which wiped out previous losses.

China’s coastal yuan recorded big moves, strengthening to a two – week high of 6.6699 against the dollar from a decline of 0.32%. The free-moving sea yuan hit a two-week high of $ 6.6855.

Although long-term U.S. government securities are seen to be higher following China’s LPR decline, it reflects equity gains.

The U.S. 10-year yield was 2.855% at the end of the day, up from Thursday’s close, and 2.922% on Friday. The two-year yield rose to 2.6327%, compared to the US close of 2.611%.

Crude prices outperformed after China’s LPR announcement, but subsequently extended declines due to concerns that demand may slow recovery.

Brent crude was down 0.53% at $ 111.45 a barrel and US West Texas Intermediate was down 1.21% at $ 110.85 a barrel.

Gold soared and set its first weekly gain since mid-April, helped by a weaker dollar. Spot gold rose 0.26% to $ 1,846.49 an ounce.

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Report by Andrew Calbright; Editing by Lincoln Feast and Sam Holmes

Our standards: Thomson Reuters Trust Principles.

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